Eurozone governments defer final decision on Greek lifeline

Eurozone governments have postponed a final decision on whether to extend a lifeline to Greece saying Athens would need to muster the will to push through harsh austerity measures before the €12 billion of funds to keep the country's economy afloat and avert an international crisis, could be released.

The 17 Eurozone finance ministers met in Luxembourg today in a bid to hammer out the structure of a new three-year bailout for the debt stricken nation in a manner such that European banks, pension funds and other private creditors would accept to roll over the country's debt.

A statement, issued seven hours into the deliberations, committed the ministers to putting together a second bailout plan for Greece, beyond the initial €110 billion euro rescue launched in May last year. Apart from more official loans, the new bailout would include a voluntary rollover by private investors of their Greek debt holdings. The statement however did not spell out the size of the new plan nor details of the rollover.

According to the Belgian finance minister Didier Reynders, a final decision on the €12 billion that Greece urgently needs would be made in early July, and would depend on the prime minister, George Papandreou, surviving a vote of confidence.

He added that to move to the payment of the next tranche, the ministers need to be sure that the Greek parliament would approve the confidence vote and support the programme.

He added that the decision would be taken at the start of the month of July regarding the complete financing strategy and the next tranche and the definitive programme.